MSE News: Car finance mis-selling payouts of £700 each likely for 14 million people

steph2212

Thanks. Wish I’d not bothered taking the advice and going through them now

Alshamal

Just received this morning anyone else got one and what dose it mean?

MattMattMattUK

Alshamal said:

Just received this morning anyone else got one and what dose it mean?

It means that there was no discretionary commission on your finance so you are not entitled to any compensation.

Ectophile

Alshamal said:

Just received this morning anyone else got one and what dose it mean?

To confuse things, there are 2 different sets of claims running simultaneously:

1. Claims for undisclosed "discretionary commission arrangements".
2. Claims that the customer wasn't told that the dealer would be paid a commission.

[At this point I should disclose that I own shares in a bank that does car finance, so I may be biased!]

1.

Discresionary commission arrangements were always dodgy and should never have happened.  Finance brokers (including car dealers) are supposed to act in the best interests of their customers.  Now imagine a scenario:

• You go to the car dealer to buy a car.
• They tap your details into the computer.
• Based on your credit history, the computer says it can do a deal at 5% interest.
• The dealer tells you that you can have finance at 6%.
• You accept the deal, not knowing you're being ripped off.
• Bank gets an extra 1% out of you.
• Dealer gets an extra bonus on their commission.

Banks should never have encouraged dealers to do that, and any customers who have been overcharged deserve compensation.

2.

When you go to a credit broker, it's nearly always the case that you don't pay them.  Instead, they get a commission from the credit company for doing the deal.  This commission should be in line with FCA rules.

For a long time, it didn't actually say in the finance agreement that car dealers would get a commission on credit deals.  It was assumed that customers should know.

Personally, I don't think anyone should get compensation for a wording issue that hasn't actually cost them any money.

Grey_Critic

Just thinking aloud.

I bought a Ford Fiesta in 2014 - so did my next door neighbour. We both bought them within a week of each other from the same dealer - no idea if it makes any difference but from the same salesman.

We have both submitted claims for undisclosed "discretionary commission arrangements “ but my question is my neighbour paid £127 less for his. Can I claim for discrimination? I know for a fact they are both Manchester United fan whilst I support Manchester City.

MyRealNameToo

Ectophile said:

Alshamal said:

Just received this morning anyone else got one and what dose it mean?

To confuse things, there are 2 different sets of claims running simultaneously:

1. Claims for undisclosed "discretionary commission arrangements".
2. Claims that the customer wasn't told that the dealer would be paid a commission.

[At this point I should disclose that I own shares in a bank that does car finance, so I may be biased!]

1.

Discresionary commission arrangements were always dodgy and should never have happened.  Finance brokers (including car dealers) are supposed to act in the best interests of their customers.  Now imagine a scenario:

• You go to the car dealer to buy a car.
• They tap your details into the computer.
• Based on your credit history, the computer says it can do a deal at 5% interest.
• The dealer tells you that you can have finance at 6%.
• You accept the deal, not knowing you're being ripped off.
• Bank gets an extra 1% out of you.
• Dealer gets an extra bonus on their commission.

Banks should never have encouraged dealers to do that, and any customers who have been overcharged deserve compensation.

2.

When you go to a credit broker, it's nearly always the case that you don't pay them.  Instead, they get a commission from the credit company for doing the deal.  This commission should be in line with FCA rules.

For a long time, it didn't actually say in the finance agreement that car dealers would get a commission on credit deals.  It was assumed that customers should know.

Personally, I don't think anyone should get compensation for a wording issue that hasn't actually cost them any money.

Your two, in the Supreme Court appeal, wasnt as clear cut as that @Ectophile. Some of the claimants did have clauses in their contracts saying a commission would be paid but it was buried as clause 75.2.1(a)(iii) which the Court of Appeal originally decided wasnt good enough as people dont actually read what they sign but the Supreme Court overturned it. 

Not sure if you want to count it under 2 or as a new "3" that you missed, the Supreme Court maintained that DCA was a problem but also added where the commission was excessive even if the customer had been given a non-specific statement that the dealer was to receive a commission was a problem. The case in question, from memory, circa half the monies was going to pay commissions. Unfortunately the court did say what is the tipping point from acceptable to unacceptable